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Unigel has been downgraded to C from CCC by Fitch following the non-payment of coupons on its $420mn 8.75% 2026s, that was due on October 2. The notes have now entered a 30-day grace period before an event of default is triggered. Fitch believes it is “highly unlikely that Unigel will receive support from its shareholder or sell its assets in a time frame that would support its liquidity”. With the company considering a debt restructuring, it still is uncertain as to whether Unigel would be able to make its bond payments. Unigel is said to have also violated its bond covenant wherein its leverage ratio exceeded 3.5x in Q2 leading to bondholders having the option of accelerating early maturity payments. However, it managed to reach an agreement with them to avoid accelerated repayments.
Unigel’s 8.75% 2026s were down 0.5 points to 33.5 cents on the dollar.